March 3, 2015

One of the major concerns with the FCC’s recently adopted Title II order is that it goes far beyond reasonable efforts to ensure an open Internet, and potentially interferes with Internet operational issues that historically have been handled without any government involvement. The FCC hasn’t even published its rules yet, and already we are seeing chatter in Internet circles about FCC engineering judgments and unintended consequences.

One example is the wonky topic of packet loss. Buried in the FCC’s announcement is this sentence: “Disclosures must also include packet loss as a measure of network performance.” Packet loss occurs when one or more packets of data traveling across a computer network fail to reach their destination. While one might think that packet loss is an appropriate way to measure network performance (because the fewer the lost packets the better), the reality is more complex.

Network performance is impacted by a variety of factors that include latency, jitter, path length, number of available paths, path choice, number of concurrent Internet sessions sharing a link, and others. Measuring and reporting on packet loss in isolation doesn’t account for these other factors.

The FCC unilaterally deciding which Internet metrics ISPs should focus on is problematic, and a major departure from how the Internet was created and developed. In fact, standard Internet Protocol was wisely designed so that it’s free to drop some packets in favor of others based on the unique needs of certain types of data. As the Internet Engineering Task Force (IETF) has recognized, the Internet supports multiple applications, where each application needs different delivery requirements. Some of these applications need reliable delivery while others work just fine with occasional packets being dropped. The IETF even developed a protocol called Transmission Control Protocol (TCP) that can be used by applications that cannot tolerate any of their data getting lost when a packet gets dropped.

What has made the Internet great is the fact that application programmers could design their programs to work however they saw fit. These programmers figured out how to make their applications work over the Internet even if packets got dropped occasionally along the way.

A focus on packet loss has the potential to improperly incentivize ISPs to optimize their networks to this parameter. In an effort to minimize packet loss, equipment vendors and Internet engineers would inevitably add buffers to network interfaces to absorb packet bursts in order to avoid dropping packets.

While that may sound positive, it would actually degrade Internet performance since packets would now have to wait in long lines to go through the Internet. These long lines, or big buffers of packets, would also have the potential to break the TCP protocol, as TCP was also designed from the beginning knowing the network would drop packets when it reached capacity. TCP uses this as a signal to itself to slow down the transmission of data to reduce the likelihood of future packets from getting dropped. With a focus by the FCC on minimization of packet loss, many applications such as Skype, Google Hangouts, FaceTime, and gaming apps may no longer work as well as we all expect.

The FCC’s packet loss focus is also a major departure from the typical process for establishing Internet performance measures, and a complete repudiation of the collaborative approach to measurement that the Commission has followed so successfully in the Measuring Broadband America program. The IETF and its protocols have served the Internet well up until now, but the inclusion of packet loss as a measure of network performance has the potential to severely disrupt the Internet as we know it. As the FCC embarks on a new era of Internet regulation, it should recognize how harmful its actions can be and commit to leaving the engineering to the Internet Engineering Task Force.

William Check is the Senior Vice President & Chief Technology Officer at NCTA

February 28, 2015

The Federal Communications Commission just approved one of the most expansive regulatory actions in the agency’s history. In one stroke, the commission has tainted its independence, radically departed from a decades-old bipartisan national policy of not regulating the Internet and expansively broadened its regulatory power without direction from Congress.

On Thursday, the FCC passed Net neutrality regulation that reclassifies broadband as a Title II service, akin to the old telephone network — a sweeping move that has significant regulatory implications, not just for Internet service providers, but for the entire broadband market including edge providers, middle-mile operators, and backbone facilities that together make up the interconnected networks of the Internet.

The commission justified these measures under the banner of preserving Net neutrality; yet it has gone well beyond that reasonable objective. In fact, there is little disagreement over the substance of open Internet principles. The cable industry has lived by the Four Freedoms that I laid out as FCC chairman roughly a decade ago — freedom to access content, to run applications, to attach devices and to obtain service plan information. We further accepted the FCC’s effort in 2010 to adopt rules reflecting these freedoms and sought to live by this policy rather than litigate. And since then, we have faithfully adhered to these important consumer protections in building an open Internet even though a more recent court decision threw out two of the three rules.

The FCC has said it wants to protect an open Internet, but its actions extend well beyond Net neutrality. Instead, it is ushering in a backward-looking regulatory regime that is unsuited to the dynamic and innovative Internet. Thursday’s vote allows the FCC to regulate rates, set terms and conditions of business relationships, and dramatically increase the cost of network deployment. It also gives state and federal governments new opportunities to impose taxes and fees on consumer bills.

What will this mean for American consumers? In the short term, the Internet will not work differently. We will continue to enjoy the same open Internet experience that we do today. But the price we will pay over time for this radical shift in regulation will be severe. Consumers are likely to see higher bills from new taxes and fees and expenses related to regulatory compliance, along with a host of unintended consequences. They will wait longer to receive faster next-generation services. Internet providers, which spend massive capital to dig up streets, hang wires and connect homes, will see this intense chain of activity subjected to regulatory second-guessing that will slow the dynamic improvements we all desire. And garage startups, which today assert with confidence that the new regulation doesn’t apply to them, will soon find themselves caught in the government’s ever-expanding web.

Internet evangelists frequently promote the virtues of innovation without permission. We now move to a world that turns that on its head. Networks may be less exciting than new software apps, but they too require innovation, evolution and revolution. That process now is subject to constant bureaucratic review, political considerations, and collateral attack by competitors.

The FCC is attempting to sell its action out of both sides of its mouth. To one audience it brags it is adopting the strongest rules possible, while simultaneously trying to assure others its plan is a light-touch, modern regime with no government entanglement in the market. It is dream-weaving to suggest that a regulatory agency, having built a new regulatory platform, will not expand its intervention with time. It always happens.

Today’s commission cannot anticipate the actions of future commissions that will now have regulatory weapons never before available. The FCC cannot fully control the actions of state taxing authorities that will seek to expand their reach. It is naive in not appreciating that competitors will now have a new forum to slow, impede or attack competitors. Large regulatory systems more often serve as fences that keep new competitors out, thereby strengthening the market advantage of incumbents. And the FCC moves Internet policy from a framework of cooperation to one that is adversarial and highly partisan, resulting in more litigation and court decisions on how the market works.

Thursday’s action begins a new chapter of competing visions for the Internet — one where government regulators play a central role in directing how the Internet evolves, versus one in which entrepreneurs, private enterprise and consumers expressing their preferences set the terms for the future. The latter has a superior record in delivering value to consumers. The former has repeatedly failed.

The FCC unfortunately has chosen a path that will lead to prolonged litigation, marketplace uncertainty and unintended consequences that could stretch throughout the entire Internet ecosystem. This is a seminal transformation, but it will not be the last word. We regrettably will be forced to seek redress in other branches of government, and the promise of permanent Net neutrality protections will be deferred to another day.

February 25, 2015

Reclassifying ISPs as common carriers under Title II raises all kinds of concerns, but perhaps none are more important than the potential for Title II to harm everyday broadband users.

Here are the top five (or should it be bottom five?) ways Title II hurts consumers:

Title II opens the door to FCC micromanagement of rates and practices

Although FCC Chairman Tom Wheeler has said there will be “no rate regulation” under Title II, that is not entirely true. The Commission plans to retain authority under section 201(b) of the Communications Act, which gives the agency authority to ensure that all rates and practices are reasonable. While some have suggested that this FCC oversight is helpful to consumers, that view is shortsighted. Under the proposed approach, any time an ISP introduces a new service or rate plan, it will have to anticipate defending the reasonableness of that offering before the FCC or in a court. The result will be that ISPs may be reluctant to offer newer, better services simply to avoid wrangling with the Commission about whether or not they are reasonable.

Title II raises the cost of providing broadband

In a variety of ways, introducing Title II regulation will raise the cost of providing today’s broadband services. For example, the fees that cable operators pay electric utilities to string their cable or fiber networks across poles could increase under Title II. ISPs also will experience increased administrative and legal costs attributable to complying with Title II. All of these additional costs would be passed down to consumers, raising their bills.

Title II will lead to a reduction in infrastructure investment

Title II imposes a whole new set of rules and regulations on Internet access services. Following those new rules inevitably will cost ISPs more money — money that could be used to improve infrastructure. Plus, with Title II comes an enormous amount of industry uncertainty. If regulations make an ISP’s investments riskier or less profitable, it’s far less likely to invest. The result will be fewer network advancements, fewer infrastructure improvements, and fewer new products. And if Title II creates a threat to infrastructure investment by established ISPs, the threat to potential new ISPs is even greater. Murky, unclear regulatory environments are the bane of the investor. If the goal is more broadband competition, the path there is certainly not more broadband regulation.

Title II could disrupt other segments of the Internet

One of the least understood consequences of the FCC’s move to impose Title II regulation on ISPs is the spillover effect it will have in other segments of the Internet. For example, in recent days companies like Google and Akamai have expressed concern about the impact regulation might have on their traffic exchange arrangements with ISPs. The FCC will be asserting itself in the Internet to an unprecedented degree and no one, including the FCC itself, has a complete grasp on the implications of that government intrusion for various Internet players and the customers they serve.

Title II will lead to new Internet taxes

They say the ‘T’ in Title II stands for taxes. A recent Progressive Policy Institute study showed that $11 billion in new taxes and fees could be added to the delivery and consumption of broadband. While this estimate has been somewhat controversial, and predicting how state and local governments will react to an FCC decision necessarily involves some speculation, we have no doubt that there will be situations where new taxes and fees will be imposed on broadband customers as a result of the reclassification of broadband service. Whatever the amount of these taxes and fees proves to be, there is no question that new taxes will directly affect consumers by raising the cost of broadband service and depressing interest among non-adopters.

All of these problems (and many more not listed here) can be avoided if, instead of granting the FCC sweeping authority over the Internet with Title II, Congress establishes a bipartisan net neutrality law. We can have our cake and eat it too – net neutrality protections along with incentives to grow and flourish.

February 25, 2015

NCTA President & CEO Michael Powell was interviewed yesterday at Fox Business News, discussing the future of the Internet and the FCC’s role in regulating Internet policy. With only days before the FCC votes on its latest net neutrality plan, Michael again addressed the need for better Internet policy. He notes that the Title II solution likely to be adopted by the FCC will lead to years of net neutrality uncertainty – not the sensible rules the Internet needs.

February 24, 2015

We’re just a few days away from the FCC’s vote on new Internet regulations. NCTA President & CEO Michael Powell was on CNBC’s Squawk Box this morning discussing how the FCC’s proposal is likely to lead to litigation and create years of uncertainty. Powell goes on to say how we can have strong net neutrality protections…

February 23, 2015

In April, the FCC issued its draft of proposed rule making on new Open Internet rules designed to replace those struck down by the DC Circuit court in January. Since then, a torrent of conversation and debate has taken place discussing those rules, the concept of net neutrality, broadband policy, and the role the FCC…

February 18, 2015

INTX is introducing a brand new event taking place at the show in Chicago this year: INTXHACK. It’s a 24-hour developer challenge that kicks off the Saturday before the show. Technologist, developers, and designers from across the media and entertainment industries will come together to compete in an epic battle to create innovative applications. INTXHACK,…